BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Thursday, 5 September, 2002, 08:49 GMT 09:49 UK
North Korea welcomes foreign money
Pyongyang skyline
Pyongyang is reforming its economy
North Korea has announced that it will open up its companies to more foreign investment, as part of a new policy to liberalise its economy.

The Korea Trade-Investment Promotion Agency (Kotra) said that it would now allow foreign investors to take stakes in Korean companies of more than 50%.

"In the case of joint ventures, foreign companies could take only up to 50% of stake in the past, but now there is no problem if their stake goes above the level," Kotra said, quoting North Korea's vice trade minister Kim Yong-sul.

The country is hoping that the rule change will encourage Japanese and South Korean businesses to take a greater stake in the North Korean economy.

Economic sea-change

In the past few months, North Korea has devalued its currency and abolished a convertible version of the won used in transactions with foreigners.


The measure is an effort by Pyongyang to expand trade and business with other countries

Kim Sang-shik
Kotra

The country has also raised prices and wages, and placed more emphasis upon companies being profitable.

Changes to the foreign ownership rules were explained at a conference in Tokyo, which was attended by about 50 Japanese businessmen.

"The measure is an effort by Pyongyang to expand trade and business with other countries," Kim Sang-shik, a Kotra official, said.

He added that North Korea had attracted $120m (76.7m) of foreign investment to a special trade zone at the end of 2000 - more recent figures were unavailable.

Socialist profits

The new economic policies aim to wean factories and companies in North Korea off state subsidies and become self-sustained.

A South Korean soldier passes by Reunification Train at the Dorasan Station, north of Seoul
The two Koreas will build a rail link

North Korea's planned economy has been in place since the communist state came into being in 1947.

People in the country have been afflicted by droughts and numerous natural disasters, acerbated by an inefficient economy.

The economy grew by 3.7% in 2001, after a 1.4% expansion the previous year, according to estimates from the Bank of Korea - the South Korean central bank.

Following the ownership rule change, Kotra said it expected more South Korean companies to take stakes in companies across the border.

Trade between the two neighbouring countries increased by 8.9% year-on-year to $215m in the first half of this year.

Plans to build railway and road links between the two Koreas were agreed last month.


Nuclear tensions

Inside North Korea

Divided peninsula

TALKING POINT
See also:

28 Aug 02 | Business
26 Aug 02 | Asia-Pacific
22 Aug 02 | Business
19 Aug 02 | Asia-Pacific
14 Aug 02 | Asia-Pacific
10 Apr 02 | Asia-Pacific
31 Jul 02 | Asia-Pacific
22 Jul 02 | Country profiles
29 Jul 02 | Asia-Pacific
27 May 02 | Asia-Pacific
28 Aug 02 | Asia-Pacific
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes